'People helping people'

Jessica Weston City Editor Jessica_Weston9

Thursday

Mar 7, 2019 at 12:01 AM

Bruen talks credit union philosophy with Rotary

Why do credit unions do what they do? The answer, according to Desert Valleys Federal Credit Union CEO Eric Bruen, is simple. The credit union movement is based on the concept of “people helping people.”

Bruen was on hand at the Rotary Club of China Lake meeting Wednesday to talk about the history of DVFCU; the past, present and future of credit unions in general; and how he thinks a credit union should adapt to and enhance a tight-knit community such as this one.

Bruen, who said March 6 marked his 15th anniversary of moving to Ridgecrest, started with a little history. The organization now known as Desert Valleys Federal Credit Union was originally chartered in 1946 as Searles Lake Community Federal Credit Union. A location in Ridgecrest was opened in 1999 on Balsam Street. The name was changed in 2007 to Desert Valleys Federal Credit Union, and the Trona branch closed in 2011.

“Essentially, we started in one community and we are now part of this community,” Bruen said.

DVFCU now serves around 4,400 members in the IWV and Trona and has $40 million in assets with a loan portfolio of roughly $22 million.

According to Bruen, DVFCU is a fraction of the size of AltaOne and Navy Federal Credit Union.

“We are the smallest financial institution in the entire community,” he said. “In fact, a lot of people don’t realize that.”

Bruen said the brand has been enlarged in scope over the last eight or nine years due to the decision to make an important strategic change in 2011.

“I identified something about this community that I love . . . the most powerful brand in this town is word of mouth. It ultimately is the greatest driver. If you are delivering a service and a value to people they will tell their friends about the value.”

This realization led to a change in emphasis for the credit union and a renewed commitment to community.

“We said we are going to be committed to the community and community values,” Bruen said.

He added that one of the values has to do with taking responsibility for members on a personal level.

“It’s very rare that a business stops and says, ‘We will take personal responsibility for ourselves and improving our members’ lives.’ It means that if you are a member, it is my responsibility. I have to be accountable for trying to make your life better,” he said. “It’s just a different way of thinking about financial services and that’s what we did.”

On a related note, DVFCU has also “re-invested” more than roughly $200,000 into community organizations over the last eight years.

The credit union has done extraordinarily well during Bruen’s tenure. Since 2014, Desert Valleys has grown from $24.8 million to $40 million. According to Bruen, this makes DVFCU the fastest growing credit union under $50 million in assets statewide during that period.

In 2017, Desert Valleys became one of only six pilot credit unions selected to offer the REEL Program, a residential efficiency program. In addition, the new mobile branch added in 2018 “is the first of its kind for our size and scope,” according to Bruen.

He added that in April 2019, Desert Valleys will be the first credit union in California to offer prize-based certificate accounts.

“We changed our mindset about innovation, bringing something new to the table and investing in the community at the same time,” he said.

Bruen also spoke on some of the differences between banks and credit unions. Credit unions are democratically controlled, with one vote per member.

“Simply put, you give us your savings, we lend it out to the community,” he said.

“As a tax-exempt, not-for-profit, community-driven organization, I don’t have to pay a stockholder. I don’t have to meet stockholder expectations,” he explained later.

Credit unions are based on a cooperative business model framed on 1930s farms. All earnings are retained by members and the community.

Membership in Desert Valleys is geographically determined. “Credit unions work on a field-of-membership model, which means that you have to be within a defined category,” Bruen explained.

Like many credit unions, Desert Valleys determines this geographically. “Our geographic boundary goes to the Nevada border, north to Bishop, west to Isabella and south to Highway 58, Mojave Rosamond area,” Bruen said.

Members must live, work or worship within that geographic area or be sponsored by an existing member to join DVFCU.

Credit unions are changing and the model is in danger, according to Bruen. The big problem, he said, is not that credit unions are fiscally challenged but rather that credit unions are becoming more and more like banks.

The number of credit unions is steadily declining, with roughly 300 closing a year. As an example, according to Bruen’s presentation, there were 5,757 credit unions in 2017 and 5,483 in 2018. He added that 45.4 percent of American citizens belong to a credit union.

Bruen predicted that the number of credit unions will likely continue to decline and that credit unions which do not adapt to technology will fail.

He added that protection of tax-exempt status is critical to credit unions’ future success.

“Credit unions must find and serve their niche. Competition is too fierce if you try to be everything to everyone,” his presentation stated.

Bruen concluded his presentation with a joke about the elephant in the room, one of his other jobs as the president of the Ridgecrest Charter School governing board.

Bruen noted that he accidentally deleted a joke from his last presentation slide: a note asking for questions about the charter school. The reference, of course, was to the hot-button issue of whether or not RCS will have its charter renewed by the State Board of Education, or alternately possibly open a new school called the Ridgecrest Elementary Academy of Language, Music, and Science, also known as REALMS.

“I literally have not answered a question about the credit union for a month,” he said with a laugh.

Bruen also talked at length about his love of the community. “Ridgecrest has become home,” he said.

He said he also has a deep love for Desert Valleys, referring to it as his 15-year-old child. (Bruen is the father of three, with one more on the way.)

“The coolest thing about being part of the credit union is I can actively re-invest into the community,” he said.

According to Bruen, he took the job at Desert Valleys against the advice of his father – who also was the CEO of a credit union.

“I still remember when I took the job; he told me not to take it. He said, ‘You’re buying a turd,’ ” Bruen recalled. “And I said, ‘But I’m 27 and they’re willing to let me run with the turd.’ And that was the best decision that I ever made.”

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